supervisor avalos: welcome to the budget and finance committee. i am joined by supervisor sean elsbernd. we will shortly be joined by ross mirkarimi. the clerk of the committee is mr. victor young.

>> [clerk announcements] supervisor avalos: thank you. please call item no. 1 and 2. >> resolution approving six new airline/airport lease and use agreements between the city and county of san francisco and various airlines, effective july 1, 2011, to allow such airlines to conduct domestic and international flight operations at san francisco international airport. item 2. resolution approving modifications to the terms of two airline/airport lease and use agreements between the city and county of san francisco and alaska airlines, inc. and continental airlines, inc. to allow such airlines to modify the rental of terminal space. supervisor avalos: thank you, victor. we have thms. kathy widener.

>> thank you. the airport is here today seeking your approval for six airline leases. the terms of the leases before you are identical to the 25 airline leases that the board approved in may of this year. this is the new agreement. you will see another batch of airlines coming to you at the beginning of the new year. we believe another seven to 10 will sign onto the new leases. this will allow us to continue our annual service payment to the city. the current agreement expires in 2011. as these airlines are signing on, they are agreeing to another 10 years. an important part in that is the continual annual service payments. under the terms, the airport

anticipates revenues of approximately $366 million over the 10-year term of the lease. the proposed modifications to the existing leases were to continental and alaska, and it will reduce their overall square footage by 5.1% at the airport. the terms are identical to those that you approved in may. happy to answer any questions. supervisor avalos: how many airlines are next? >> we have given them a couple of dates to sign as they are making their business decisions. the next batch will likely come before you in the new year, maybe january. that should be it for a while. if we get a new airline and they sign on, that new lease would

have to be acted on to begin service. it depends on the internal asset process. some require a board of directors to approve. some of them already had their financial plans set at sfo for the next 10 years. we just need to give them a role in opportunity -- instead of giving them a deadline, it made sense to give them a period of time in which they could work this through internally. supervisor avalos: [inaudible] >> yes, 2011. mr. rose? >> the only thing i would add is on the two airlines where there would be modifications to their lease, there would be a reduction in rent to the airport on an annual basis of $767,000. under the break-even policy,

those revenues are recovered from all of the airline's if another tenant is not found for that space, it would be reduced. if you approve these new six leases, over the 10-year term, it is estimated the airlines would pay fees to the airline totaling $355 million. we recommend that you approve the resolutions. supervisor avalos: thank you, mr. rose. let's open this up for public comment. anyone that would like to comment on item 1 or 2? public comment is closed. motion to move forward with recommendations. without objection. item 3 please. >> resolution approving the san

francisco municipal transportation agency contract no. cs-156, agency capital program controls system procurement, and related support services, to hill international, as negotiated, for an amount not to exceed $22,268,541 for a term not to exceed eight years, with expenditures limited to $13,481,000 pending receipt and certification of additional funding. supervisor avalos: thank you. >> good morning, a committee. i am the construction manager for this project. before you we are seeking approval of contract to establish a capital program control system for the agency. the program that we would like to put in place it replaces an existing one that replaces -- that dates back to 1970.

it is not well integrated with our peril systems. this would gather information to monitor progress from the birth of the project, to the end of a project. the contract in this particular case competed with one additional firm. they also need the sbe requirements of 26%, and they will do this with local subcontractors. we have this contract extending for eight years. it will also service the needs for all other projects in our agency. it will all be monitored on a real-time basis. if there are any questions, i did here to answer. supervisor avalos: thank you. we will hear from mr. roh's first. >> -- rose first. >> based on the report, hill

international did score the highest reporin our report. as was also shown in the report, sfmta has secured and received $10,784,000 of the total project cost. the national federal and grant funds, as well as another $2 million from prop k sales tax funds. that is a total of $30,481,000 of the total estimated needed amount of $22 million. however, no funds can be expanded until the comptroller certifies the funds.

we recommend that you approve this resolution. supervisor avalos: thank you. colleagues, any questions? since this contract is going to expire in eight years, in terms of managing the capital program after that, do we expect to do another rfp? >> our system will be in place. eventually, the system will be serviced by our own people. this one would be installed within the first couple of years. from there, it services the project needs. as projects, and for that need those services, they can apply for them. supervisor avalos: i am looking

at the cost in the budget analysts report. staff, technical support, 17%. a great preponderance of the contract is for that. you expect after the central subway is completed, this level of spending may not be necessary as it will be taken over by mta staff? >> yes. supervisor avalos: ok. any member of the public that would lead to comment on item 3? seeing none, public comment is closed. without objection. thank you. item 4. >> resolution approving an amendment to the budget of the redevelopment agency of the city and county of san francisco for fy2010-2011 by authorizing expenditures in an amount not to exceed $520,743 for

personnel positions associated with the implementation of the candlestick point - hunters point shipyard phase 2 project. supervisor avalos: mr. blackwell, welcome. >> good morning, mr. chairman, members of the committee. before you today for your consideration is a proposed amendment to the agency's budget to -- in the amount of $520,743 for the provisions associated with implementation with the hunters point shipyard phase two and candlestick integrated project. this amendment was approved by our commission in june after consideration of the documents associated with the entitlements for the project.

as you are aware, in august, the board of supervisors approved the plan for this, and these are associated with implementation of that plan. this is a project that is huge, in terms of size and complexity for us. the personnel that will be in these positions will be responsible for all aspects of coordination and management of the project, including management of the process of transferring land from the navy, implementation of the alice griffith redevelopment project. we have a number of on-site property management duties that we will have to fulfil, in addition to raising state and federal funds, my entering the grants, monitoring the development of the program. the final thing i will say about this that is important is the position that will be needed,

that we are requesting right now, will be fully covered by the developer, pursuant to the disposition agreement negotiation with one hour. we will be able to bring these positions on without impact to the agency or city's general fund. >supervisor avalos: thank you. when do you expect these positions to begin? >> once this is approved, we will have to post the position. probably a 30-day period. there are a number of things that we are working on right now, so there will not be a ton of laps in the work. we have been working on these through the intimate phase and they are still on board, working

closely. supervisor avalos: so you say that the staff coming on will carry on some what with the duties from workforce development. >> what is important to note in the process is the office of economic and workforce development basically negotiates the entitlement process. like mission bay, phase one, the implementation of the shipyard gets handed over to the agency. supervisor avalos: thank you. supervisor mirkarimi? supervisor mirkarimi: do we know the people who would be hired for this? how far along are we there? >> currently, there is staff at the office of economic development that have worked on the entitlement part of this. in an ideal world, what we would

have done is just a transfer of staff, but we cannot do that because the agency is a separate entity. we will be posting these positions. i anticipate staff that is currently working on this at the office of economic workforce development will be applying to these jobs, pursuant to an agency eligibility. supervisor mirkarimi: do we know anybody in redevelopment that fills these positions, will these position be prospectively filled, a combination? >> staff has been working at this at oewd. i anticipate that both staff members will be applying for these positions but we do not know now what the outcome will

be. supervisor mirkarimi: how many positions? >> 3 positions. a senior project manager, assistant project manager, and staff assistants. the senior project manager -- for every one of our project areas, we have a project manager and assistant manager. for this project, we also anticipate a staff associate. in the agency, those are generally folks who do city planning-type of work. that will be the position responsible for a lot of review of the major phase applications submitted by the developer, engaging in a lot of the activity that we were involved in prior to the entitlement phase. supervisor mirkarimi: thank you. supervisor avalos: supervisor elsbernd? supervisor elsbernd: if after

this gets approved, if those individuals are the ones that are hired, will there be an amendment to the budget eliminating the positions in oewd? >> these positions are not in the city budget. they are agency positions. supervisor elsbernd: i know. my question was if these individuals are hired by the agency, and thus their oewd positions are vacated, will those position be eliminated? particularly because they have only been doing this work anyway. >> i do not know the answer to that question. i do not know if we are intending to eliminate those positions. i think it depends on what other projects we have coming up that would require stopping.

i can get back to you on that. supervisor elsbernd: it would certainly be my preference if that is done, if those individuals are hired. i know it is not your call. supervisor avalos: i would concur. supervisor elsbernd: could we have something in here that asks the agency to notify the budget committee if the individuals hired our city employees somewhere else, and then we will have the opportunity to ask the mayor what the story is? ok. maybe we do not need to add anything. supervisor avalos: thank you. let's open this up for public comment. seeing none, public comment is closed. supervisor avalos: i will move with the recommendations predicated upon. the administration has signaled

they would like to get back to us. to the full board with recommendations. item five. >> -- supervisor avalos: item number four was recommended. >> item 5. resolution authorizing the amendment of four existing leases (at 729 filbert street, 650 fifth street, 160 south van ness avenue, and 109 new montgomery street) to reduce the rent and extend the lease term for the department of public health, human services agency, and the department of child support services. supervisor avalos: thank you. >> good morning, members of the committee. it is a pleasure to come to you with an item like this which is related to savings of rentals. john updike, assistant director of real-estate. we have four items before you.

i will give you a brief terms and conditions, outline of these four amendments. this is the result of a query we made in concert with the city's overall efforts to reduce contract costs wherever possible, to 94 different landlords where we had these commitments of at least $1,000 per month, seeking for some consideration a reduction in rentals. not exactly a robust response to that request. our financial times are the same as many of the landlords, but we managed to secure these four. out of those 94, we have five, and these four before you today are first 729 filbert st., a dph location.

a rent reduction of 5%. the consideration the city is giving in exchange for this is an extension of a lease of five years. 655 fifth street, dph location, that is a rent reduction, also an approximate 5%. here, we are extending the lease for one year. for the department of child services, 109 new montgomery, 617 mission, looking at an extension of two years, five months, additionally, an option to reduce our footprint at inappropriate time during the lease. that reduction is also 5%. lastly, 160 south than ness, an hsa property.

there we are looking at a 5% reduction and extension of the lease for one year. the budget analyst did an excellent job summarizing the general fund element of these savings as well as the non- general fund elements. it concurs with this recommendation for approval. any questions, we also have staff from each of the affected departments. supervisor avalos: thank you. mr. rose? >> members of the committee, as shown on page five of the report, under table 3, total annual savings, this 5% to 5.3% is $83,000. that translates to the general fund of a savings of $28,206 on an annual basis. we recommend that you approve

the resolution. supervisor avalos: thank you. thank you for the work of finding these reductions. we can open this up for public comment. any member of the public that would like to speak? we will close public comment. motion from supervisor mirkarimi. without objection. to the full board with recommendations. item 6. >> item 6. resolution authorizing the san francisco department of public health to accept and expend retroactively a grant from the california department of rehabilitation in the total amount of $7,685,055 to provide vocational rehabilitation services to clients for the period july 1, 2010, through june 30, 2013, waiving indirect costs. >> good morning. i am with the department of public health services.

i am here to talk about the grant from the department of rehabilitation vocational services. this is a collaborative agreement that we have had with the department of rehab, now going into our 18th year, i believe. this is the third that i can remember, doing this particular work. this is our third resolution before you. it provides -- it allows for a variety of different vocation services to our consumers who are receiving services. supervisor avalos: thank you. mr. rose? >> the total state grant is $7,785,000. that is over a three-year period, andit